Thursday, June 14, 2007

Apple Over Takes Microsoft! Is It Possible?

Robin Bloor, writing for IT-DIRECTOR.COM, asks the question as to how long it will take for Apple to surpass Microsoft in size? Thats a question that only a fool, a few years ago, would have ever dared to ask, but now with the success of the ubiquitous iPod, the Intel-based Macs, OS X and now the much hyped iPhone on it's way, this is a question that now makes a lot of sense and not as silly as it might seem.

Is it really possible? And how long would it take for Apple to topple Microsoft? Well, only God Himself knows for sure, but the facts are pointing to it not only possibly happening, but possibly a lot sooner than most would have imagined.

For starters, all one has to do is look at the growth rates of the major high tech companies. In the past few years, in revenues, Microsoft grew from approximately 33-billion to some 44-billion. Impressive, for sure, but when you consider that Apple's revenues went from about 6-billion to 21-billion in the same period, and it is projected to hit 41-billion dollars this year, its not hard to see were Robin Bloor is coming from.

What is also interesting to note is that sales of the Mac are now growing at 36% yearly; Window based PC's are growing at approximately a mere 10-11 %. Not only that, but slightly more than half of all new Mac purchases are now made to PC switchers which portrays a very interesting story indeed.

According to Mr. Bloor the respected market caps of the main PC companies compared to that of Apple is also a very good tell-tale sign that Apple can indeed supersede Microsoft in size. For example: Apple's marketcap is now almost twice that of Dell's - 104-billion vs 61-billion; slightly a little less than powerhouse HP - 121-billion to Apple's and Cisco's 162-billion. Even mighty IBM is within striking distance at 153-billion! Currently Microst, at the top, stands at 288-billion. Clearly Mr. Bloor is not blowing smoke here.

The respected financial site SeekingAlpha reported the iPhone could now ignite Apple's already high stock price of $118 to a staggering $200 plus in the very near future! That alone would almost double Apple's impressive market cap... in other words, this very year Apple would become the second most valuable company after Microsoft. Its hard to believe that ten-short years ago Apple's market cap was approximately 1.9-billion and the company was facing the very real prospect of becoming nothing more than a foot note in the history of high tech! How well I remember Michael Dell telling reporters that the best thing Steve Jobs could do (after recently returning to head the company) 'was to shut the whole thing down and give the investors their money back.' Now it is Dell that is in the hot seat... which only shows that Mr. Bloor predictions are, indeed, not only possible but maybe even probable!

And just when does Mr. Bloor think that Apple will over take Microsoft? Well, in that regard let's let him answer that in his own words:

"The fact is that Vista didn't stop Apple's momentum at all and now that Leopard is about to be released, Vista already looks like yesterday's OS. The curious thing about Apple's success is that it is hardly competing directly with Microsoft at all. Microsoft doesn't build phones (it only does a phone OS) and it doesn't build PCs (just a PC OS) and it doesn't do retail either. However at some point Apple's success will reach a tipping point, and Microsoft will be in trouble in the OS market. I'm thinking about 2–3 years."

And that's my two cents regarding Mr. Bloor's assessment. Right on dude!